Welfare implications of the interaction between habits and consumption externalities
Alonso Carrera, Jaime (Universidad de Vigo)
Caballé, Jordi (Universitat Autònoma de Barcelona)
Raurich, Xavier (Universitat de Girona)

Imprint:	CREA-Barcelona Economics, 2004
Description:	16 pàg.
Abstract:	We analyze the welfare properties of the equilibrium path of a growth model where both habits and consumption externalities affect the utility of consumers. Our analysis highlights the crucial role played by complementarities between externalities and habits in order to generate an inefficient dynamic equilibrium. In particular, we show that the competitive equilibrium is inefficient when consumption externalities and habit-adjusted consumption are not perfect substitutes.
Grants:	Ministerio de Ciencia y Tecnología SEC2003-00306 Ministerio de Ciencia y Tecnología BEC2002-01995 Generalitat de Catalunya SGR2001-00162
Note:	Altres ajuts: Xunta de Galícia-PGIDIT03PXIC30001PN
Rights:	Tots els drets reservats.
Language:	Anglès
Series:	CREA working paper; 125
Document:	Working paper ; recerca ; Article ; Versió publicada
Subject:	Habit Formation ; Consumption externalities

16 p, 286.7 KB

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Research literature > Working papers